WASHINGTON–The latest GDP numbers for year-end 2023 are “surprisingly positive,” according to one credit union economist, and come even as data also show a cooling in the pace of inflation and no indications of a recession.
Gross domestic product, adjusted for inflation grew at a 3.3% annual rate in the fourth quarter, the Commerce Department said. That number was below the 4.9% rate in Q3, but far surpassed many forecasters’ expectations.
‘Better Than Anticipated’
"Fourth quarter GDP exceeded expectations as consumption remained strong, inventories held up better than anticipated, and trade made a surprising positive contribution to growth,” said Curt Long, VP-research and chief economist with America’s Credit Unions. “When considered alongside the slowing growth in payrolls, this report provides further evidence of a pickup in labor productivity, which is helping to tamp down inflation. Overall, this report is consistent with America’s Credit Unions’ forecast of three rate cuts from the Federal Reserve in 2024."
Additional Highlights
Additional highlights from the report include:
- For the full year, measured from the end of 2022 to the end of 2023, GDP grew 3.1%, up from less than 1% the year before and faster than in any of the five years preceding the pandemic.
- During Q4, consumer spending grew at a 2.8% annual rate, only modestly slower than the prior quarter.
- The housing sector grew modestly for the second quarter in a row.
- Businesses stepped up their investment on equipment.
- Personal income rose faster than prices.
- Consumer prices rose at a 1.7% annual rate in the final three months of the year, below the Fed’s long-run target of 2%.
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